After dipping despite a pro-business Budget, the Colombo stock market yesterday gained though profit taking checked the upward trend.
The ASPI finished the day up by 7.94 points (+0.12) and MPI by 18.80 points (+0.27%)
“The market opened sharply but gave back its gains during the course of the day,” John Keells Stock Brokers said. NDB Stockbrokers described the day as one of “marginal recovery” as indices gained during early trading and closed on a marginally positive note. “Selling pressure seems to be discouraging the investors to invest aggressively,” it added. Turnover amounted to Rs. 2.4 billion largely on account of two crossings of 2,211,500 shares at Rs. 300. However the share price decreased by Rs. 0.30 (0.10%) and closed at Rs. 295.10. It peaked to a high of Rs. 299.
Despite positive sentiments over Budget 2011, the market remained lackluster Monday and Tuesday and it began yesterday on a two month low. Positive start was encouraging thanks to bargain hunters but profit taking exposed the fragility of the rebound yesterday.
Bourse has fallen 10.3 percent since hitting a record high of 7,207.75 points on 4 October, mainly due to a lack of credit in the market.
It is Asia’s best performer in 2010 with a 90.6 percent gain.
Reuters quoted analysts as saying the markets are yet to digest the 2011 budget proposals and assess the impact on them, though the private sectors has overall welcomed the plans due to the lower tax regime it proposes.
The bourse is trading at a forward price-to-earnings ratio of 20 compared with all-Asia’s 13.2 and global emerging market’s 12.4, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 42.6, towards the lower neutral limit of 30.
Foreign investors have sold a net 28.1 billion rupees in shares this year, but on Wednesday bought a net 5.4 million rupees.
Bank Finance & Insurance and Diversified sectors were the highest contributors to the market turnover. Banking sector index increased by 0.23%, while Diversified sector index decreased by 0.07%. Apart from deals on JKH and Cargills, there were three major crossings — 677,300 shares of Commercial Bank at Rs. 274; 1,000,000 shares of Colombo Dockyard at Rs. 292 and 187,000 shares of Sampath Bank at Rs. 265. Foreign holding of Commercial Bank decreased by 89,700.
Meanwhile the rupee closed firmer at 111.28/30 a dollar from Tuesday’s 111.30/35, its highest since 15 December, 2008, with the Central Bank lowering the dollar trading band by 10 cents to 11.20/60, currency dealers said.